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Is frugality about saving money or making you feel less guilty?

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In the fascinating article, “The Green Bubble: Why environmentalism keeps imploding,” Nordhaus and Shellenberger cite this provocative study that has close parallels to frugality:

“It’s easy enough to point out the insignificance of planting a garden, buying fewer clothes, or using fluorescent bulbs…But the ecological irrelevance of these practices was beside the point. What downscalers offered was not a better way to reduce emissions, but rather, a way to reduce guilt. In 2007, we asked environmentalists in focus groups about green consumption. None thought that consuming green would do much of anything to address a huge challenge like global warming. They did it anyway, they said, because it made them feel better.”

What is the point of saving money on obsessing about small expenses like lattes? Is it to truly save money, or is it to reduce guilt?

I’m curious to hear what you think, although iwillteachyoutoberich readers are self-selected against small frugality.

I’ve always believed that you can’t out-frugal your way to rich. And it’s not just about the math ($3/day doesn’t really add up to that much). More importantly, it’s about the psychology of big wins: Most of us are never going to completely stop spending money on the things we love — especially daily things like our morning coffee — so exhortations to “just stop buying those lattes” are invariably meaningless. Plus, there’s the Paradox of Choice: The more things we worry about, the less we do of anything at all.

And then there’s guilt.

If there is one thing I hate, it’s behavioral change based on guilt. Yes, guilt can cause you to change your eating habits or spending, but the attitudinal and behavioral change is usually short-lived and ineffective.

In Guilt and Our Choices, I wrote:

In college, I never understood the jackasses who would say they had “tons of work to do” and that they “should work” and would go to the library for 13 hours, where they would chat on AIM, read maybe a total of 25 pages, and come back telling everyone they’d been at the library “all day” (wipe brow). This smacks of stupidity and when I saw this, I thanked god that he made me a tall but frail man, because if I were Mike-Tyson-sized, there would be some trouble for everybody.

I’ve found that guilt is a hugely insidious influence for people, especially people our age. We’re making decisions about classes, careers, money, and life because of guilt in a hugely disproportionate way. How many people do you know that major in econ because they’re guilty about their parents paying $160,000 for them to attend college? Or they go to law school? Or choose some particular job because they “should”?

How much of “saving” money is about guilt? Do we feel guilty about splurging for dessert or buying those jeans…but then do it any way? How many friends do we know who say, “Yeah, I really should save more money…”

Or do we create a conscious spending plan, decide strategically what we love and what we don’t, and spend accordingly?

I’m curious to hear what you think about guilt and spending. What do you do? What do your friends do?

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  1. I found the environmental quote very interesting. It seems Rush is right. As for the money, $3/day isn’t much… per day. Over the course of a year it’s eleven hundred dollars, give or take. I don’t know about you, but to me that’s more than pocket change. I don’t understand why people would feel guilty about spending money. It’s yours, you (hopefully) earned it – do whatever you want with it. Just be aware that you can only spend it once. A year’s worth of lattes or that new MacBook.

  2. Cheapskate raises a good point about how small changes can add up to big results. However, I also agree with Ramit that those small changes don’t make sense unless you make them consciously, with a goal. Changing things because of guilt is silly.

  3. I often feel “buyers remorse” when I spend money I know I shouldn’t be spending. In the moment, I really want it, but afterward I feel the guilt. Its not necessarily when it comes to $3 lattes, but more so when its on the $50 jeans I bought, knowing I already have 5 good pairs at home.
    I think the key is being aware of your spending and conscious of it everyday. I check my bank accounts daily to keep myself in check. When I see the numbers, I’m less likely to want to spend.

  4. Two things in life are certain: Until the end of time, Ramit will keep valuing big wins over frugality, and commenters will keep missing the point and point out that not buying a 3 dollar latte adds up to hundreds of thousands of dollars if you wait 80 years.

  5. I go through buyer’s remorse sometimes, but I don’t really feel guilty about most things I buy. I try my best to be frugal with my purchases, but if I know I have the money to pay for it, then I don’t really feel that guilty at all.

  6. We drive a Prius, recycle, and do everything else green that we can think of. It’s not about guilt, it’s about empowerment. Problems like global warming are so huge, they can cause us to despair, give up, or adopt a selfish, ‘who cares, I’ll just do whatever I want attitude,’ which if done by everyone, makes things even worse. It’s because so much is not under your control that you need to “just do a little.”

    It’s different with managing your money. There you have a great deal of control, and it makes sense to go for the big wins. If you want to save on lattes too, that’s fine, as long as you don’t become a bore to your friends. But you should definitely go for the low-hanging fruit first. That, by the way, is what our governments should do too, with respect to the environment. After you’ve gotten all of those, then you start to work on the harder things.

  7. I would say in general I never feel guilt about the cost of things, but I will fill guilt about the purchase itself. For instance I am more likely to feel guilty about the unhealthyness of an Ultimate cheeseburger at Jack in the Box, but I really am not impacted by it’s monetary cost. That being said food and travel are probably my guilty pleasures but I never regret the monetary costs. Even gambling to me is not prevented by guilt. I do have friends and family however that don’t spend money because they “shouldn’t” and in most cases they are right. If they do spend the money associated guilt does effect their enjoyment of the purchase.
    The point of all this, guilt is not a constraint for me when it comes to money, I am bothered by waste if I purchase something I do not use. So frugality in my case is simply me exercising my spending philosophy.

  8. It’s about savings… Frugality is empowering, good for personal development and the planet.

    The truth is $3 a day on lattes does add up, and not in 80 years. In 5-6 years @ 6% appreciation that’s over $8,000. That’s over $10,500 in taxed income.

    And we all know it’s more than $3 dollars a day… Saving $10 a day over 10 years at 10% performance = $64,000.

    I’m frugal, crucify me… To me retiring at 30 is more important than having a damn coffee every day.

  9. The thing that most people mess up is not that they unnecessarily spend $3/day on lattes, it’s that they don’t have goals. Or they have wishy-washy dream goals that they haven’t fleshed out or planned for. This is why the stuff Ramit advocates, the “bigs wins” and the like, works. Because if you work out all of your goals and plan for them, you can then do whatever the hell you want with the rest of your money. Lattes for all! Designer jeans! Power to the people!

    You know, once your Roth IRA is funded and you’re setting aside money for that big-ass wedding you want.

  10. I get pre-buyer’s remose – I will stand in a store for an hour and debate about whether I should get the new shoes or whatever. However, I NEVER feel guilty afterwards.

    I am naturally pretty frugal, though, just because I don’t see the point of a bunch of stuff. The BF has an EXTENSIVE list of things he wants…I am hard pressed to come up with a Christmas list each year because I just don’t see the point.